There was no open tender for the acquisition of the Second Generation Patrol Vessel Littoral Combatant Ship as it followed the privatisation agreement signed between the Government and Boustead Naval Shipyard Sdn Bhd (BNS) more than 15 years ago, said Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi.

He said 27 of the second generation patrol vessels would be built through the agreement signed on Dec 11, 1995. "This was to develop the national maritime industry and to extend the development of technology and heavy industry.

"It has created many jobs and business opportunities for the vendors," he told Lim Lip Eng (DAP-Segambut) who questioned the tender process before the contract was given to BNS. He also enquired about the cost to build the ship.

According to an international market survey referred to by the minister, a vessel with similar ability was priced between RM1.5bil and RM2.7bil, but the Government had yet to finalise the actual cost.

Replying to Lim's supplementary question on the rationale behind the acquisition of the vessels, Ahmad Zahid said it was a necessary move. "Our neighbouring countries are also in the midst of increasing their naval capabilities, so Malaysia should not be left out," he said.